Novartis Reports $390 Million Settlement in Kickback Case

Novartis has reportedly agreed in principle with the Department of Justice to settle a whistleblower lawsuit brought under the False Claims Act for $390 million. The complaint filed by the DOJ in 2014 alleges that the company paid kickbacks to specialty pharmacies for prescriptions involving Myfortic and Exjade. The whistleblower filed the complaint informing the Justice Department of the potential fraud in early 2012 following the company’s $420 million settlement with the government in 2010.

A trial had been scheduled in the case for November. At issue would have been the allegations that Novartis induced specialty pharmacies to recommend the above drugs to patients through deals to provide them discounts and referrals for increased sales. More than $3 billion in Medicare and Medicaid payments as well as damages and penalties under the False Claims Act were at stake. Novartis had been under a Corporate Integrity Agreement as part of its 2010 settlement for off-label promotion of drugs and kickbacks, so it may have also included stipulated penalties for violating the terms of that agreement.

The Department of Justice had previously settled with some of the specialty pharmacies implicated in the case. Bioscrip agreed to pay $15 million last year and made extensive factual admissions in the case. Accredo Health Group and Express Scripts each settled federal and state claims for $60 million in May.

Novartis has been called a repeat offender by the U.S. Attorney in this case. However, the company is reportedly neither admitting nor denying liability as part of the settlement. And the settlement of the case does not resolve all of the allegations that the U.S. Government is currently pursuing against Novartis.

The DOJ has partially intervened in another case filed by a whistleblower in the Southern District of New York. The complaint in this second case alleges that the company used speaker program fees to doctors as kickbacks to increase the sales of their cardiovascular drugs. The speaker programs were essentially shams, according to the complaint. Our firm represents the whistleblower in the ongoing case against Novartis.

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